Every month, throngs of people are connecting to the Internet via broadband for the first time ever. And according to Dave Caputo, CEO of Sandvine, about half of them call their provider that first month to report that their connection “seems slow.” Providers don’t know what to tell them, Caputo said at a panel discussion this week. It’s a subjective assessment, perhaps fueled by advertising that promises lightning-fast speeds sure to blow consumers away. But problems like these linger in part because consumers lack an adequate vocabulary to describe the increasing diversity of broadband offerings. (How fast is fast?)

And the problem is going to get worse.
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No less a source than Mark Cuban is pointing out the current fallacies of the Internet video model, although he is using Craig Moffett of Bernstein Research to do it. Moffett has become the industry’s supreme number-cruncher, a guy willing to look past the spin to what quarterly earnings and federal regulatory reports actually tell us. He’s the canary in the coal mine about recent access line losses, among other things.

This time, though, Moffett, and now Cuban, are taking on the reality of advertising support for video and how Internet video is undermining the current market, while priming a new audience of viewers to expect to not only get video content for free, without ads, but to also get only the best of what content creators have to offer.

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Consumers clearly still have mixed feelings about watching full-length features films on their mobile handsets, but the market for using the mobile handset as a universal remote to search for and buy that movie has yet to really be explored. A partnership between CinemaNow and uVuMobile, announced today, aims to change that. The combination of the digital entertainment company and a mobility software and services company will bring about a WAP service allowing consumers to view movie trailers and remotely download the full-length movie to the PC or TV back home.  more

The former CEO of a struggling operator is now taking over the board of a struggling vendor. It’s probably crossed more than a few of your minds that Dave Dorman played none too small a role in SBC’s acquisition of AT&T, which eventually took his former company’s venerable moniker before he retired. Now as chairman of Motorola, he’ll oversee Moto’s split into two entities: one focused solely on handsets and the other on a diverse array of carrier, enterprise, government and consumer equipment. more

For the past five months, I have been covering the always exciting, sometimes troublesome world of IPTV. New deployments, old problems and the latest applications have made news on the pages of Telephony, along with the battle between AT&T’s U-verse service, Verizon’s FiOS TV and a host of other telcos offering different levels of IP-based networks. It’s great to hear of the promise and much-touted user experience from the companies bringing it to market, but we want to know the real scoop on the service from you millions of subscribers. more

Just one month after launching its full complement of content on the Helio network, YouTube took its new mobile platform worldwide. Thursday it brought its whole video catalog to the mobile device, allowing anyone to access any video from the mobile Web site, m.youtube.com or, from some phones, a downloadable Java client. It’s allowing people to log in and access personalized setting, and enabling sharing, ratings and comments. And what’s more, YouTube is supporting the upload of video directly from the mobile phone. I probably don’t need to emphasize the importance of this. No content sharing service or social networking site has yet extended all of its content and functionality to its mobile portal. It’s quite simply a boon to the industry. Or it would have been. Unfortunately the service doesn’t appear to work. more

When I climbed into the SUV in the Las Vegas Convention Center parking lot, Motorola Networks CTO Dan Coombes asked, “Got your laptop? Well, pop it open.” Moto and Intel had set up a demo WiMAX network around the convention center and Las Vegas strip, and they aimed to show it off. But instead of passively watching the typical demo, they invited me to try to push the networks to its limits while they carted me around the city. I love a challenge.

To set up some context, Motorola and Intel were taking a bit of a risk of here. We all know the rules of demos. Half the time they don’t work. Wireless demos are particularly cantankerous–which usually explains the Ethernet cord that snakes out from under the counter. So, to do a live demo in a moving vehicle during rush hour traffic in one of the most congested areas of the U.S. took some chutzpah.

Motorola and Intel have done this kind of thing before. In Chicago at WiMAX World, Motorola rented out a tourist boat and cruised it up and down the Chicago river, running two dozen WiMAX devices at full tilt in the process. There, however, they had a base station every quarter to half mile, each pointing directly at the wide-open murky expanse of the river. There was no way that setup wasn’t going to deliver. In Vegas, though, the situation was a bit more tenuous. Moto decided to set up a temporary network using Clearwire spectrum six weeks before the Consumer Electronics Show, and according to Coombes, they had to rig an awful lot of stuff together at the last moment.

The access points were installed about a mile apart in rough circle around the convention center. There are no 25-story casinos sticking out of the Chicago river, so in Vegas Moto and Intel had to show that MIMO really works. The modem that Moto used was its newly announced MIMO home gateway, a device that really isn’t supposed to be moving around at 40 MPH leaping from sector to sector, Coombes explained. To get it to work, Coombes’ engineers yanked off the MIMO antennas, and taped on two large plastic flanges that looked as if they had been just cut off the Venetian blinds in his hotel room. This contraption along with a Wi-Fi router was mounted behind the backseat, while the rest of the car was packed to the gills with Intel-powered gadgetry all connected to the WiMAX modem through Ethernet cables and Wi-Fi.

My hosts warned there would be dead spots, and dead spots there were. As we passed under the towering steel curtain of the Wynn Hotel–where we stayed trapped for 10 minutes–in gridlock traffic, the Internet radio stream cut off, the onboard navigation system stopped remapping and everyone’s browsers popped up error screens. Meanwhile the WiMAX modem went haywire desparately searching for a signal. But after passing out from under the Wynn’s shadow–and quick reboot of the modem–the network worked impressively.

Admittedly we were one of the only three cars on the network so capacity wasn’t much of an issue, but I did my damndest to overtax the bugger. I simultaneously played YouTube videos on my Wi-Fi enabled phone, previewing songs from the iTunes store on an iPod touch, and downloading the biggest honking files I could find on my laptop. Meanwhile the Internet radio was blaring, the in-car navigator was chirping away and live video feeds from the other vehicles were streaming over a peer-to-peer connection on another computer (Coombes, who I suspect was a bit bored after a full day of reliving same demo, was also checking his e-mail via Outlook). And during all this IP commotion, I managed to navigate my way TelephonyOnline.com without the slightest hiccup.

I figured it was time for a real test, though. YouTube is for bandwidth-challenged sissies. Could the network handle a DVD-quality stream of a feature-length movie? So I went to Netflix’s movie-on-demand page and selected a good three-and-a-half hour long movie for our in-car enjoyment. This may have been a little more than I bargained for. My computer didn’t have the proper software, so Netflix began downloading all 25 MBs of Windows Media Player 11, updated my codecs and made me restart my computer. But as we pulled in to the parking lot of convention center, the opening credits of Les Miserables began playing full-screen on my computer. I admit, I was impressed.

I have a remote for my television set, DVD player, audio system and even one left over from the VCR days. As a result of my plethora of remotes, it often takes a good ten minutes and a lot of frustration to navigate between all the entertainment options. For this reason, I was especially excited to hear about software developer Hillcrest Laboratories’ news this week.

In conjunction with CES, Hillcrest announced it has secured an additional $25 million round of funding, led by new investor AllianceBernstein. Hillcrest said it will use the funds to further extend its pointer-based application creation platform and pointing technology to devices that control and display digital media.

As a start-up company seven years ago, Hillcrest has been in the development and innovation stages for the better part of its existence. Now as high-definition TV sets with higher resolutions improve the picture quality, encourage interactivity and new applications, 2008 is poised to be Hillcrest’s year to make it big.

In the fall, I spoke with Danny Briere, CEO of TeleChoice, who told me that Hillcrest is historically a favorite company of the analyst firm’s to follow because of the “insanely cool stuff” it develops. Specifically, he was referring to its sleek new air mouse that uses soft buttons on the TV set and an interface users navigate similar to the PC. Since insanely cool technologies are what CES is all about, I had to check it out for myself. Having done so, I wasn’t disappointed.

According to CEO Dan Simpkins, Hillcrest’s vision is to bring a new “‘point-and-click’ paradigm to the television and beyond” through its pointing technology, Freespace, which can be used in remote controls, PC mice, and game controllers. Parag Sheth, vice president of corporate marketing for Hillcrest, said that the traditional 100-button remote control will become a thing of the past as consumers want new ways to interact with all the content exploding today.

Hillcrest, which licenses its technology business to business to consumer electronic companies and service providers, is emphasizing two main differentiators in its pointer devices: efficiency of interaction – users can point anywhere on the screen without having to scroll, search or even aim at a particular point on the screen – and scalability of the presentation as users get access to hundreds of movie titles, their personal content, Internet services, games and traditional TV through spatial, contextual navigation.

The remotes are reminiscent of Nintendo’s Wii game-changing controllers that also require simply pointing and clicking. Sheth said that Hillcrest’s designs have some distinct advantages over the Wii, namely its Adaptive Tremor Removal. The technology gets rid of the natural tremor in user’s hand to allow for accuracy in pointing. Furthermore, it doesn’t require the level of activity that the Wii encourages. The devices works whether consumers hold the device upside as they lie on the couch, sideways or even if they are grabbing a drink in the other room. Using wireless RF technology, it doesn’t even have to be pointed at the TV set, STB or wherever the service provider opts to embed the software.

Steth said that we can expect service providers to begin marketing the technology in the summer of ’08, and the company hopes to announce customers in the first half of the year. I, for one, am excited to see the industry reaction to this decidedly insanely cool new product.

LAS VEGAS – Yep, after delivering the keynote address at the Consumer Electronics Show eight times since 1994, Microsoft chairman Bill Gates is giving up his annual role as technology seer for a life focused on his charitable foundation. If you hadn’t heard, Bill Gates is retiring from Microsoft, and he’s going out with a little humor. At CES he spoofed his rather eccentric and geeky personality with a video in which he called everyone from Bono to Hillary Clinton looking for some activity to occupy his time (to see the keynote Webcast see Microsoft’s Press Pass page).

Starting next year, we’ll have to listen to someone else’s vision of technology at CES. Maybe it’s blasphemous to say, but I think it’s for the best. Gates and Microsoft haven’t exactly been on the cutting edge of innovation of late. The company sells an awful lot of software, but the average person on the street stopped getting excited about the newest release of Windows in about 1995.

Frankly the most spectacular jumps in consumer electronics in recent years have not come from Microsoft. Apple gave us the portable digital music player. Microsoft gave us the Xbox, but only after Sony and Nintendo turned the game console into a massive global market. And in a technology closer to home, Microsoft’s probing into the mobile space has been mediocre at best–Palm invented the smartphone, while RIM and Apple perfected it for the enterprise and the consumer, respectively.

Sound like I’m Microsoft bashing? Perhaps I am a bit. But I’m not criticizing the company or its business model. It makes great products (well, some are greater than others) that people buy by the boatload. But it’s been quite some time since Microsoft came up with the next big thing. Just look at what Gates and Microsoft cohorts preached from the CES pulpit: social media, home networking, even video sharing. It looks neato, but it’s hardly a new gospel. We’ve been seeing the same stuff presented at conferences for years.

Maybe that’s the value of Gates’ keynotes. Just as Microsoft’s software might allow it to turn a cutting-edge innovation into a mass-market phenomenom, maybe Gates’ keynotes validate those innovations to the industry at large. If you saw Bill talk it up at CES, then you know the technology has legs. But maybe it’s time the keynote was delivered by a true visionary in the technology world instead of the industry’s most successful reactionary.

Keep tuned to Unfiltered this week. Associate Editor Sarah Reedy and I will be making daily updates to the blog.

The Netflix-LG announcement today is just one more sign of what’s coming in the video competition wars. As we head into CES, we can expect a lot more news of this type. Netflix is planning to stream movies directly into LG High-Definition television sets, bypassing any existing service providers with its video content, which includes thousands of movies and TV titles.

While telcos are moving as fast as they can — note the qualification there — to deliver video services, the current sellers of video content are going to stand still and watch their market disappear. Just as AT&T will try to exploit IPTV to make its U-verse service all-encompassing, consumer electronics makers and content distributors will capitalize on the ubiquity of the Internet to extend their reach as well.

The result is likely to be a much more fragmented video entertainment market than already exists today. Cable companies and telephone companies won’t be able to take for granted the appeal of their video-on-demand services, and they are going to have to work harder to sell all the extras and add-ons that many of them are developing now.

Services like the ones Netflix and LG are promising to offer will have greater appeal to a younger audience that glommed onto Netflix first and is already doing much of its video viewing over the Internet. Telcos and cablecos will have to work harder to convince the members of this crowd that they want to pay a major monthly fee and sign two-year contracts for services.